Domino's Hangs Tough

 | Oct 19, 2011 | 6:38 PM EDT
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In football they call it the checkdown. That's when the quarterback checks down the list of his receivers to see who is open. On days like today, I like to think like a quarterback. That means I want to examine the case for throwing the pigskin to different players to figure out how I can score or advance the ball, always fearful of a turnover, of getting intercepted, because my stock isn't "open" and is well covered by the defense.

In the case of the stock market, checking down means looking at my lineup and deciding which stocks I can buy right here and which ones have too much risk of losing money. I think about my obvious wide receivers who can get open, who I can hit on the fly and won't get annihilated if Europe turns the market down.

And today, like yesterday, there was only one I was pretty sure could withstand Europe. I didn't want to go to my fast wide-outs, like Apple (AAPL). Too dangerous. I didn't want to go to my slot receivers. All well covered. I just wanted to flip it to a tight end in the flat. And that tight end in the flat is Domino's Pizza (DPZ).

Yes, Domino's. Why Domino's? Because the company has gone from being a sloppy, not-that-good or good-tasting pizza delivery company to a technology company that gets great-tasting pizza to you without any screw-ups.

Right now, as you may have heard from Patrick Doyle, the CEO, the stars are aligned for Domino's and will stay that way, perhaps for another 10%-15% move. Raw pizza costs? Coming down. International expansion? Accelerating. Labor? Coming down, because the Domino's web-ordering page enables the company to have fewer people answering the phone.

You know how you can tell this stock isn't done going higher? Because it is only stock I follow that recovered fully from the European news onslaught and worked its way higher after the market's breakdown.

That's the kind of wide-open receiver you want to check down to and win with.

Right now, this stock is under dramatic accumulation from people who realize that the numbers aren't too low but are way too low.

Sure, it would be terrific to get it under $30. I just don't know, though. Because if it didn't give up anything under the late-day swoon -- again, it was the only stock I follow that didn't -- then you might have the makings of a stock that gets open and stays open that you can hit over and over and, ultimately, find the end zone.

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